MARKET REACT: NO OBAMA RALLY - Reuters/Hong Kong, 2:26 a.m.: “Asian stocks fell on Friday as a $447 billion jobs package from President Barack Obama failed to entice investors back into equities amid concerns that political wrangling could see it watered down. ... ‘Obama's plan was in line with expectations, and U.S. stocks are unlikely to rally on it,’ said Takashi Ushio, head of investment strategy at Marusan Securities Co. in Tokyo” http://reut.rs/pdpZ83

Story Continued Below

EUROPE ALSO OPENED LOWER while U.S. futures were flat at 3:30 a.m.

QUICK WALL STREET REACT: NOT TOO BAD - Jack Ablin, chief investment officer at Harris Private Bank, emailed M.M. after watching the speech on DVR (as many did given the early hour of the address): “Sounded like a stump speech but contained some interesting ideas. The big picture stuff sounds good, like reduced red tape, but it won’t create jobs next week.”

POTENTIAL GDP IMPACT - Nomura, via BusinessInsider: “The passage of measures within The American Jobs Act has the potential to alter our baseline forecast for US economic growth. For example, extending the 2% social security tax cut for employees would raise growth in Q1 2012 real GDP by as much as 1.0 percentage point, and by 0.5 percentage points in 2012 overall." http://read.bi/pJLVSe

THREAT UPDATE: INCREASED NYC SECURITY - Bloomberg: “New York police will increase security after receiving credible information that terrorists may be plotting an attack in the city around the Sept. 11 anniversary ... The threat concerns a possible al-Qaeda-sponsored attack targeting New York or Washington on or near the anniversary of the Sept. 11, 2001, attack, said a U.S. official ... The official said the intelligence concerns a possible vehicle-borne attack, perhaps on a transportation hub or bottleneck, and cautioned that the options may be broader than a car or truck bombing.” http://bloom.bg/q6dhye

WORD COUNT - Obama urged Congress to “pass” the bill 18 times and asked that they do it “right away” eight times and used the word “jobs” 44 times. Full text: http://1.usa.gov/nixyYI

BOEHNER REACT - House Speaker John Boehner said the proposals “merit consideration” adding: “It’s my hope that we can work together to end the uncertainty facing families and small businesses and create a better environment for long-term economic growth and private-sector job creation.”

THE REALITY - Obama’s actual bill, when it gets to the Hill, is DOA, especially the stimulus spending pieces. But the tax cuts, which Republicans already mostly supported, have a good chance in other legislative vehicles. Republicans are considerably less secure in their “Just Say No” footing following a series of polls showing their approval ratings even lower than the President’s. ...

Why it took Republicans so long to realize Americans are disgusted with all of Washington and mostly blame the GOP for the debt ceiling debacle is a totally baffling mystery. But they now seem to get it. So a full and unequivocal public rebuke of the entire package is less likely than it was just a few days ago. ... The size of the proposed package (while not going to be law) also means Obama can tamp down some screaming from the left that he has been far too timid (see Krugman react below).

COUNTER-NARRATIVE: WHAT OBSTRUCTION? - Former Bush administration official Tony Fratto of Hamilton Place Strategies emails that an Obama campaign against a “do nothing” Congress will not work: “What exactly of the Obama economic plan has been obstructed? He got stimulus, he got his housing policies, he got Dodd-Frank and health care reform, he got unemployment extensions and Cash 4 Clunkers, he got payroll tax cuts extended, Build America Bonds, hiring tax credits, 1st-time homebuyer tax credits ... And what he keeps railing on Congress to pass -- the trade deals -- haven't even been sent to Congress, yet. So, exactly which of President Obama's job creating programs was obstructed by Congress?”

SUPERCOMMITTEE: HARD JOB NOW HARDER - POLITICO’s Scott Wong and Manu Raju: “Obama’s request Thursday night that the deficit-cutting supercommittee come up with a way to pay for his $450 billion job-creation bill is ‘discouraging’ and makes its task ‘nearly impossible, GOP panel members said. ‘It’s a little discouraging that he’s going to at some point give us additional responsibilities when we’re struggling to meet the ones we already have,’ freshman Sen. Rob Portman (R-Ohio) told POLITICO after Obama’s address to a joint session of Congress. http://bit.ly/qAdtLM

GOOD FRIDAY MORNING - Quite a show by the Packers’ offense last night as the defending champs knocked off the Saints, 42-34 in a game that never actually felt that close. M.M. was not far off, having picked the Pack, 31-27. Best bet this weekend: Jets over Cowboys.

DRIVING THE DAY - President Obama begins a campaign to sell his jobs program in “every corner of the country” with an 11:35 a.m. speech in Richmond, Va. ... G-7 leaders meet in Marseilles, France to discuss the global economic outlook with a focus on slow growth and the European debt crisis.

NEW HUNTSMAN SHAKE-UP - POLITICO’s Jonathan Martin: “Jon Huntsman, lagging in the polls and apparently low on money, is again shuffling his organization and moving resources from Florida to New Hampshire. Jim McCray and Monica Notzon, two Washington-based fundraising consultants for Huntsman, are parting ways with the campaign ... Ann Herberger, a longtime fundraiser in Florida who had been working for Tim Pawlenty, is joining the campaign as the finance director. Also coming on board to work as a senior communications adviser is Ben Porritt, a press hand who worked for John McCain and George W. Bush.” http://bit.ly/pi9GJo

GASPARINO: DALEY WANTS TREASURY - FOX Business’s Charlie Gasparino: “Tim Geithner says he staying ... but FOX Business has learned that the White House continues to maintain a list of possible replacements ... [I]f Geithner were to leave today, his most likely successor would be someone already in the administration: White House chief of staff William Daley.” http://fxn.ws/pdfbxZ

GEITHNER OP-ED: RESTORING GROWTH - Sec. Geithner, who apparently remained in office as of last night, writes in the FT: “The question is not whether we have the economic or financial capacity to act to strengthen growth, but whether we have the political ability to do the right things. [T[he U.S. should act to strengthen growth and employment. ... Europe needs to take more forceful action to generate confidence that it can and will resolve its crisis. ... China and other emerging economies need to continue to strengthen domestic demand and allow their exchange rates to adjust to market forces.” http://on.ft.com/nBJbdh

QUOTE OF THE DAY - Fed Chair Ben Bernanke, asked if he saw Paul Giamatti play him in TBTF: “I didn't see that move. I saw the original.” Bernanke made a little news in Minneapolis by suggesting consumers are being overly cautious. His comments seem to suggest he, like M.M., is not that big a fan of all the constant Economic Freak Out coverage. Fact is the economy is pretty crummy but not disastrously bad. And it doesn’t really make any difference if we double-dip slightly or “grow” at near zero. They are pretty much the same thing.

OBAMA REACT FLY-AROUND -

U.S. CHAMBER’S THOMAS J. DONOHUE - “[H]is ideas appear to fall short. A workable jobs plan must genuinely reduce regulatory uncertainty, unshackle promising American industries, and not be overly reliant on government spending and subsidies.”

NYT’S PAUL KRUGMAN - “I was favorably surprised by the new ... plan, which is significantly bolder and better than I expected. It’s not nearly as bold as the plan I’d want in an ideal world. But if it actually became law, it would probably make a significant dent in unemployment.” http://nyti.ms/mUaTgK

DEMOS PRESIDENT MILES RAPOPORT - “Refusing to focus on austerity, ‘no we can't’ ideology, and scare tactics tagged to future deficits was the right theme to sound for the choices we face now. The commitment to greater investment must be seen through, but this was a real start.”

NYT EDITORIAL - “[A]n ambitious proposal — more robust and far-reaching than expected — that may be the first crucial step in reigniting the economy ... [V]ague on several important elements, notably a direct path to mortgage relief for troubled borrowers.” http://nyti.ms/nBGp3T

WP EDITORIAL - “It will be essential to see not only how the president proposes to pay for the package but how he envisions making certain that those savings materialize. ...Will workers spend every penny of their tax savings? No, but history suggests enough will to make the cut worth trying.” http://wapo.st/nNB2XT

ATLANTIC’S MEGAN McARDLE - “I think that it's generally solid on the spending/tax cut side. The targeted employment stuff is basically a decent plan--we should be aggressively looking for ways to keep the long term unemployed from turning into the permanently unemployed.” http://bit.ly/nrmRGk

THE NARRATIVE -

LAST GASP - POLITICO’s Carrie Budoff Brown: “In a last-gasp attempt to jolt the economy and his reelection prospects ... Obama ... put forward a $447 billion jobs package, challenging Congress to shut down the ‘political circus’ and pass his bill as soon as possible. .. Obama disregarded ... political reality and called on Congress to approve his American Jobs Act ‘right away’” http://bit.ly/paEYGF

LAST CHANCE - WSJ’s Carol E. Lee and Naftali Bendavid on pg. A1: “might be the White House's last chance to revive its political fortunes before the 2012 campaign kicks into high gear ... [A]n attempt to wrest the initiative in Washington's protracted debate about fiscal policy. Both parties emerged from the debt-ceiling fight this summer with their approval ratings heading south as the economy stalled with the unemployment rate stuck above 9%. ... a tone that was alternatively demanding and exasperated ... Mark Zandi, chief economist at Moody's, estimated that the plan would add 2 percentage points to real GDP growth and 1.9 million payroll jobs, while reducing the unemployment rate by a percentage point.” http://on.wsj.com/qElAJN

PUNCHY TONE - NYT’s Mark Landler in one-column A1 lead: “Mixing politically moderate proposals with a punchy tone ... Obama challenged lawmakers ... Republicans listen[ed] politely but with stone-faced expressions ... the package was substantially larger than predicted, and much of the money would flow into the economic bloodstream in 2012. ... Obama seemed to get off his back foot. He framed the debate over the economy as a tug-of-war between mainstream American values and a radical, antigovernment orthodox.” http://nyti.ms/qaT3dJ

LOW POINT - WP’s Dan Balz: “Obama ... spoke with a renewed sense of urgency ... at a low point in his presidency. His standing has been weakened by public dissatisfaction over the effects of high and persistent unemployment. But just as worrisome for the White House are questions about whether he is a leader with the strength and skills to make Washington work.” http://wapo.st/nCCxpM

ALSO MAKING NEWS -

ROMNEY RIPS PERRY ON “PONZI” SCHEME - POLITICO’s Jonathan Martin and Maju Raju: “Mitt Romney launched a second wave of attacks Thursday on Rick Perry and Social Security - suddenly and unmistakably the central focus of the Republican race. From talk radio to Twitter to Capitol Hill, Perry’s fiery description at Wednesday’s debate of Social Security as a ‘Ponzi scheme’ was the grist for an intense dispute within the GOP family. ... Romney, sensing an opportunity to halt Perry’s surge in the polls, went even further than he did on the debate stage, asserting in blunt terms that the new frontrunner had rendered himself unelectable ... Perry officials noted that Romney used his policy book, ‘No Apology,’ to liken the management of Social Security to a felony.” http://bit.ly/r93SMN

INDUSTRY REACT - FSI President & CEO Dale E. Brown: “If adopted this legislation would... bring about significant improvements in investor protection and a balanced playing field for all financial advisors.”

PRIVATE EQUITY INVESTMENT STUDY - From an industry study: “Private equity firms invested more than $148 billion in 1,234 U.S. based companies in 2010 ... The top five states in terms of deal value were California, Illinois, New York Texas and Connecticut. ... According to the analysis, private equity firms invested $8.5 billion in 21 companies in Illinois’ 7th Congressional District, represented by Democrat Danny K. Davis, more than any other U.S. congressional district.” Full study: http://bit.ly/ox0QJl

QUICK CLICK: APPROPRIATIONS PRIMER - “Bankrupting America” has a new tutorial up looking at the approps process. http://bit.ly/pDuqNp

BOFA EYES 40K CUTS - WSJ’s Dan Fitzpatrick on pg. C1: “Bank of America Corp. officials have discussed eliminating roughly 40,000 positions during the first wave of a restructuring ... The numbers aren't final and could change. The restructuring would reduce the bank's work force over a period of years. In fact, Mr. Moynihan may not discuss a job-cut number during next week's presentation at the Barclays Capital 2011 Global Financial Services Conference in New York. He could choose instead to outline the bank's expected savings, after telling investors last month that he aims to reduce quarterly expenses by as much as $1.5 billion.” http://on.wsj.com/nvhfaO

FANNIE/FREDDIE NEAR SETTLEMENT - NYT’s Ben Protess and Azam Ahmed on pg. B1: “Regulators are nearing a settlement with Fannie Mae and Freddie Mac over whether the mortgage finance giants adequately disclosed their exposure to risky subprime loans ... The proposed agreement with the [SEC], under the terms being discussed, would include no monetary penalty or admission of fraud, according to several people briefed on the case. ...

“But a settlement would represent the most significant acknowledgement yet by the mortgage companies that they played a central role in the housing boom and bust. And the action, however limited, may help refurbish the S.E.C.’s reputation as an aggressive regulator, particularly as the country struggles with the after-effects of the financial crisis that the housing bubble fueled.” http://nyti.ms/qDdSd4

STOCKS NEAR SCARY MILESTONE - FT’s Telis Demos: “The correlation between the movement of big US stocks is at the highest level since Black Monday in 1987, with price moves increasingly driven by the ebb and flow of investors’ fears over the economic environment. ... [M]arkets of late have been characterised by mass selling alternating with waves of buying, as investors upgrade or downgrade the risk of the US slipping into recession, or a financial crisis sparked by a European sovereign default. The correlation between the biggest 250 stocks in the S&P 500 over the past month has reached its highest since 1987 this week, at 81 per cent, according to JPMorgan figures. This means those stocks move in the same direction 81 per cent of the time. The historical average is 30 per cent.” http://on.ft.com/qrOE1V

** A message from the Independent Community Bankers of America: The first U.S. community banks were formed in the wake of the American Revolution to stabilize the nation’s postwar finances. By providing loans to entrepreneurs and developers, these community banks were soon stimulating economic growth and financing the rise of the world’s greatest democracy. Their legacy of relationship banking and local economic and job growth continues to this day, with more than 2,500 of the nation’s community banks in business for more than 100 years and the oldest dating to the presidency of John Adams. Today serving communities in every congressional district, community bankers nationwide urge Congress to advance tailored banking regulations that will allow these job creators to continue supporting local economic growth for decades to come. www.icba.org/aboutus **

Authors:

About The Author

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.